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When you say "stuff," are you referring only to high-rises? Lynd/Kairoi is quite active and successful in both Austin and San Antonio. Heck, they've quietly developed a massive, 300+ unit apartment complex on 620 near Hudson Bend (among several other big projects). |
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With so much construction in general happening in Austin and with the Independent, 3rd + Shoal, Austin Proper, and Fifth + West happening, I totally didn't realize that so few projects had started up until I read this. But you're right!
Alexan seems like a lock. I'm surprised it took so long for development to start in that area since everybody has known for years that Waterloo Park is going to be bad-ass once it's finished. Alexan is going to get the jump on other developers but it's still a late jump. I think all of your picks are logically sound, The_ATX. But what about The Avenue? Is that looking more like a 2019 timeline? |
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311 Bowie got built so I would say that is a good track record. Also even if financing has not been announced, that doesn't necessarily mean they are not close to securing financing. Usually that is kept under wraps until the deal is done and set. I agree that we need to see signs that the Extended Stay is about to close down, so far that hasn't happened yet. |
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The next wave will be interesting. With the next recession looming, how many will actually come out of the ground?!?
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I won't answer for anyone else, but honestly...recessions are always looming. It's cyclical.
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I think there's the possibility of a recession plus one for construction -- not only the standard cycle finally coming back around, but the effect of tariffs on construction material.
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Well, maybe it's not exclusively Americans. Torontonians have been wringing their hands about an impending "bubble" for years. I mean YEARS. |
I'd be skeptical to layer the cyclical market onto Austin's development. It's a legitimate worry but realize there's several assumptions to be made to tie these things together and predict development tanking.
The biggest one is assuming that the regional economy will mirror that of the nation/world as a whole which is likely not going to be the case after seeing our growth during the 2008 Recession. For the time being our industries are still thriving and likely still will when the next cyclical recession hits, though I wouldn't expect as well as 2008, honestly. Another assumption would be that these investors would pull out funding during a recession, which could happen but would be unlikely as Austin and Texas as a whole is still a net-positive investment on their end. In addition smaller projects with tighter budgets and weaker investors are typically the ones that get hit the hardest. This leaves construction, engineering, and architect firms to lose some of their "filler jobs" and thus they usually take on these larger projects at a slight discount because they can't afford to lose all work. It gives these larger developments more incentive to get these projects rolling. tl; dr - Austin is weird, nuanced, and there's a lot of gears moving with cyclical recessions |
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Assuming whatever recession we enter in the next 4-5 years looks like is a more normal correction and not something that catastrophic there will be capital available for projects in off-cycle sectors or regions. The last recession (hopefully) isn't a useful predictor of normal downturns. Though, all out trade wars and protectionism is a fun thing was haven't really seen at scale since pre-WWII. So, hopefully we get away from this stupidity and get back to free trade. |
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The last time tech was the cause of a recession (the dot-com bubble), so much more of the money going through Silicon Valley was speculative and the entire industry itself was in its infancy. There had not yet been much proof of profitability. Even since the Great Recession, the tech industry has matured so much and seems to run on its own set of principles that preclude some of the more volatile aspects of the economy. We haven't yet seen how the tech industry would respond to a contraction of activity now that literally everyone has a smartphone, and Amazon and other online retailers are monumental money-printing machines. None of these companies are going anywhere this time, and Austin has firmly established itself as both a tech and tourism hub in the decade since 2008. Even if a recession causes the average American to keep the purse-strings tighter, phones, tablets, and the Alexas and Siris of the world aren't going anywhere. Also, it has already been stated that if anything will tip the US into a recession, it won't be a real estate bubble this time, but either the bubble of student and credit card debt, the current trade war or continued volatility in the federal government that will do it. These big new projects coming online have shown that they are going ahead with tenants and numbers that prove their viability, and honestly, the Texas economy itself is such a steamroller that it would take more than a normal cyclical correction to destabilize everything locally. I'm not so worried at the moment. Also N90, thank you for the new rundown, I'm weeping tears of joy at these towers. YAAS :cheers: |
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1) Interest rates rising will affect property values everywhere 2) The high current valuations and the new $10K SALT deduction limit may have an impact on property values 3) There is a small but increasing investment portion of the Austin housing market; high end second homes, investment properties, etc that are not employment driven. They are, in part, counting on the high appreciation. Once that slows or even reverses a little bit, there could be a snowball effect with many properties coming on the market. Especially those that have already seen big appreciation in the last few years -- investors will want to cash in on those gains rather than risk them evaporating. Although not directly related to Austin in particular, we are in a period where everything is on the high end of historic valuation -- Stocks, Real Estate, Bonds. And interest rates are still on the low end. It just doesn't seem sustainable without at least a moderate correction. |
Wouldn’t that only affect condo development? There have been very few condos delivered downtown in the last decade; most of the new towers are office, hotel, and apartment.
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